The European Parliament last night voted in favour of reform to ‘backload’ 900mt of allowances from the EU ETS, with a 344-311 majority rejecting an attempt to water down the proposal and instead favouring a return to the original backloading plan. While the passing of the vote is not surprising, the support of stronger text indicates that lawmakers are moving towards more meaningful reform of the EU ETS, notably via the potential cancellation of any backloaded permits and through the later agreement of a longer term emissions reduction target. While the reform is unlikely to boost short term EUA prices, some upside potential has returned to the market, bringing a range of medium term price implications for both Europe and Australia.
Backloading Passes – Renwewed optimism for EUA and ACU prices
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